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Is Inogen Inc (INGN) A Good Stock To Buy?

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  • INGN

The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn't the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds' positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors' filings. In this article, we analyze how these elite funds and prominent investors traded Inogen Inc (NASDAQ:INGN) based on those filings.

Is INGN a good stock to buy? Inogen Inc (NASDAQ:INGN) investors should pay attention to an increase in hedge fund sentiment recently. Inogen Inc (NASDAQ:INGN) was in 19 hedge funds' portfolios at the end of June. The all time high for this statistic is 25. Our calculations also showed that INGN isn't among the 30 most popular stocks among hedge funds (click for Q2 rankings).

Hedge funds' reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn't keep up with the unhedged returns of the market indices. Our research has shown that hedge funds' small-cap stock picks managed to beat the market by double digits annually between 1999 and 2016, but the margin of outperformance has been declining in recent years. Nevertheless, we were still able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by 79 percentage points since March 2017 (see the details here). We were also able to identify in advance a select group of hedge fund holdings that underperformed the market by 10 percentage points annually between 2006 and 2017. Interestingly the margin of underperformance of these stocks has been increasing in recent years. Investors who are long the market and short these stocks would have returned more than 27% annually between 2015 and 2017. We have been tracking and sharing the list of these stocks since February 2017 in our quarterly newsletter.

BRIDGEWATER ASSOCIATES
BRIDGEWATER ASSOCIATES

Keeping this in mind we're going to take a peek at the key hedge fund action regarding Inogen Inc (NASDAQ:INGN).

Do Hedge Funds Think INGN Is A Good Stock To Buy Now?

Heading into the third quarter of 2021, a total of 19 of the hedge funds tracked by Insider Monkey were long this stock, a change of 58% from the previous quarter. The graph below displays the number of hedge funds with bullish position in INGN over the last 24 quarters. With the smart money's capital changing hands, there exists a few notable hedge fund managers who were boosting their holdings significantly (or already accumulated large positions).

Is INGN A Good Stock To Buy?
Is INGN A Good Stock To Buy?

The largest stake in Inogen Inc (NASDAQ:INGN) was held by Renaissance Technologies, which reported holding $14.7 million worth of stock at the end of June. It was followed by Citadel Investment Group with a $13.4 million position. Other investors bullish on the company included CaaS Capital, Arrowstreet Capital, and Millennium Management. In terms of the portfolio weights assigned to each position DAFNA Capital Management allocated the biggest weight to Inogen Inc (NASDAQ:INGN), around 0.2% of its 13F portfolio. CaaS Capital is also relatively very bullish on the stock, dishing out 0.12 percent of its 13F equity portfolio to INGN.

With a general bullishness amongst the heavyweights, some big names have jumped into Inogen Inc (NASDAQ:INGN) headfirst. CaaS Capital, managed by Frank Fu, established the most valuable position in Inogen Inc (NASDAQ:INGN). CaaS Capital had $7.4 million invested in the company at the end of the quarter. Israel Englander's Millennium Management also initiated a $4.5 million position during the quarter. The other funds with new positions in the stock are Ray Dalio's Bridgewater Associates, Michael Gelband's ExodusPoint Capital, and Paul Marshall and Ian Wace's Marshall Wace LLP.

Let's now take a look at hedge fund activity in other stocks similar to Inogen Inc (NASDAQ:INGN). These stocks are Ladder Capital Corp (NYSE:LADR), Golar LNG Limited (NASDAQ:GLNG), Griffon Corporation (NYSE:GFF), Enterprise Financial Services Corp (NASDAQ:EFSC), Costamare Inc (NYSE:CMRE), Itau CorpBanca (NYSE:ITCB), and Gevo, Inc. (NASDAQ:GEVO). All of these stocks' market caps match INGN's market cap.

[table] Ticker, No of HFs with positions, Total Value of HF Positions (x1000), Change in HF Position LADR,9,30556,-2 GLNG,17,360753,-3 GFF,10,148835,-3 EFSC,9,30331,-5 CMRE,17,48086,5 ITCB,2,1252,0 GEVO,8,33871,2 Average,10.3,93383,-0.9 [/table]

View table here if you experience formatting issues.

As you can see these stocks had an average of 10.3 hedge funds with bullish positions and the average amount invested in these stocks was $93 million. That figure was $65 million in INGN's case. Golar LNG Limited (NASDAQ:GLNG) is the most popular stock in this table. On the other hand Itau CorpBanca (NYSE:ITCB) is the least popular one with only 2 bullish hedge fund positions. Compared to these stocks Inogen Inc (NASDAQ:INGN) is more popular among hedge funds. Our overall hedge fund sentiment score for INGN is 82.8. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 24% in 2021 through October 22nd and still beat the market by 1.6 percentage points. Unfortunately INGN wasn't nearly as popular as these 5 stocks and hedge funds that were betting on INGN were disappointed as the stock returned -36.7% since the end of the second quarter (through 10/22) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as most of these stocks already outperformed the market since 2019.

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Disclosure: None. This article was originally published at Insider Monkey.